Income-oriented investors tend to like midstream master limited partnerships (MLPs) for their high yields and increasing distributions. However, it isn't often that an MLP raises its distribution by 50% or more. That's just what Western Midstream ( WES 1.
44% ) did last month when it took its quarterly distribution from $0.575 per unit to $0.875.
That's a 52% increase. It is also important to point out that this is its base distribution and not a special or variable dividend. The stock now yields an attractive 9.
4% using its closing price on May 13. Let's take a look at the pipeline operator's first-quarter results and where its distribution could be headed in the future. A great start to the year Western Midstream started the year in great fashion, recording record Q1 adjusted EBITDA of $609 million.
That was a 22% year-over-year increase. Free cash flow came in at $225 million, a nearly 60% year-over-year jump. It saw record natural gas throughput across its asset base, with volumes up 2% from the previous quarter.
Operated crude and NGL (natural gas liquid) volumes also rose 2% from the previous quarter. The company's operations in the Delaware Basin in west Texas and southeastern New Mexico -- the most prolific oil basin in the U.S.
-- saw solid natural gas volume increases of 3% quarter over quarter. Meanwhile, the company's operations in the DJ Basin, primarily in northeastern Colorado, continue to recover. Natural gas volumes rose 2% sequentially in the basin, while cru.
